Wednesday newspaper share tips: Asos, Michael Page

It remains exceedingly difficult to value Asos’s share price in any rational manner, The Times’s Tempus said.

After rising by 300p they’re back to the roughly 56 times this year’s earnings they were trading on about a year ago, which means they are discounting an “awful lot of growth”.

True, the company does not appear to be seeing a slowdown, unlike what other retailers have been reporting, particularly Next.

The company’s number of active users has jumped by 17.0% over the past year to reach 10.9m and the “successful” Christmas season saw less discounting while retail margins were up by 40 basis points.

In parallel, the online fashion retailer’s international expansion continues apace, with brisk sales in the States, although the firm has decided to pull out of its loss-making operations in China.

However, at some point the £3bn-market capitalisation outfit will need to “grow up”, leaving AIM and joining the main market. It will also need to start paying dividends, even if it insists it is currently under no pressure to do so and that it can get a 20.0% return on any cash invested.

“I still would not be a buyer of the shares, whose future trajectory looks as hard to forecast as ever. Avoid for now,” Tempus said.

Michael Page’s gross profit growth through last year slackened off to a sustainable pace of 2.0%, even if the outcome for the first quarter was flat.

Most of that can be put down to the early Easter and lost working days, although the looming vote on Brexit seems to have led some employers to delay taking on fresh staff, especially in the public sector.

Markets in China and Brazil are also challenging, with profits in each of those down by 5.0% and 31.0%, respectively, although the Netherlands and the States are trading well.

In any case, the investment case for the recruiter is premised on the amount of cash returned to shareholders. The shares offer a dividend yield of 2.8% but if the special dividend of 16p paid in October is taken into account then the yield on offer rises to approximately 7.0% and the cash is piling up again.

Worth it for that income, Buy says Tempus.